It's Time to Retire the 'Years of Service' Award

Written by
George Dickson
George Dickson

Recognition is vital to employee engagement, and 'Years of Service' awards are an ineffective approach to providing it.

Consider what Years of Service awards communicate about your company values: Do you want to emphasize the value you place on an employee's contributions, or their ability to hold down a seat for a long time?

It's not that a person's sustained contributions to a company aren't valuable and shouldn't be recognized — quite the opposite. The point is that if you're doing a good job of recognizing the great work your team does, you won't need a Years of Service award.

Here are some reasons Years of Service awards are ineffective, and some more impactful alternatives you can use to recognize and reward your employees:

1. They are not based on merit or skill.

A study conducted by The U.S. Merit Systems Protection Board in 2012 found rewards that are disconnected from effort do not have much impact on employees. According to the study, “employees who saw a strong connection between effort and outcomes (results achieved and the receipt of valued rewards) were more likely to perform at a higher level than employees who viewed that connection as weak.”

Regardless of how long employees have been with an organization, they all have unique skills and bring things to the table that deserve to be recognized on an ongoing basis.

Instead of rewarding someone simply for sticking around, think about ways you can consistently recognize and reward their skills and the positive contributions they make to the team. Interactions like these help employees understand the contributions your organization values most, and encourages them to continue making them regularly.

2. They are untimely and infrequent.

Years of service awards are almost never given concurrent to an employee’s major accomplishments, unless by chance. This robs the reward of its impact.

For example: An employee spends long nights and hours on a project, and instead of validating his efforts in the moment, his manager waits to recognize him at the annual awards ceremony scheduled in a few months.

After all that time has passed, the connection between the effort and its acknowledgement is tenuous at best; however, the memory of those thankless long hours remains.

The trouble with awards based on a calendar date is that employees don’t see the impact of their effort along the way. Recognition and rewards are crucial to employee motivation, and should be given with a frequency that sustains motivation constantly.

Instead of waiting a year, recognize employees on a frequent, timely basis. Make it easier by encouraging employees to recognize one another. It's impossible for one manager to see all of the great things employees do, so enable them to give each other credit when and where it’s due. These interactions have the additional benefit of giving management a more accurate glance into the daily contributions employees make.

3. They are obligatory.

No one wants to feel like they’re given something out of obligation. That makes the gift feel less genuine and reduces feelings of accomplishment. Years of Service awards feel obligatory because they are set to be given based on employee anniversaries. They're more like “checkpoints” than accomplishments to be celebrated.

For example, if Molly “wins” years of Service awards each year, she might feel grateful in the moment that her time is acknowledged, but her peers probably won’t care.

Give genuine recognition inspired by employees’ actions, instead of a calendar date. Recognize employees in a way that is relevant to everyone on the team. Note how their contribution to the team makes a difference beyond simply being present and accounted for.

You can make a real impact in employee engagement by determining what recognition initiatives are producing lukewarm results, retire them, and put something measurably better into practice.

Originally published on April 17, 2015 → Last updated April 1, 2019

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George Dickson

George is dedicated to strengthening organizational cultures with thoughtful leadership and frequent recognition. George formerly managed content and community at Bonusly.


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